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Glanbia: Year Progressing as Planned; Good Delivery Till Q3/2018

02 November 2018

IRELAND - For the nine month period ended 29 September 2018, Glanbia's Group Managing Director Siobhán Talbot reports that the year is progressing as planned, with volume growth of 6.7 per cent during the first nine months of the year.

Ms Talbot said: "This reflected good demand across Glanbia Performance Nutrition and Glanbia Nutritionals. Pricing declined by 4.1 per cent largely as a result of lower year-on-year dairy markets which is also benefitting input costs, and we expect full year margins in GPN and GN will be in line with the prior year.

"We continue to execute our strategy and, in addition to growth in our core business, we recently announced the acquisition of SlimFast which will further enhance our portfolio. We reiterate our full year guidance of 5 per cent to 8 per cent growth in adjusted earnings per share, constant currency, for the continuing Group in 2018."

In the first nine months ended 29 September, wholly owned revenue from continuing operations increased 3.7 per cent. On a reported basis, reflecting the weaker US Dollar Euro foreign exchange rate, revenue decreased by 2.6 per cent when compared to the same period in 2017.

Revenue increase, on a constant currency basis, was driven by volume growth of 6.7 per cent, and acquisitions delivered 1.1 per cent. Pricing declined by 4.1 per cent compared to the same period last year as it was driven by relatively weaker dairy markets and brand investment.

Glanbia Performance Nutrition (GPN) delivered revenue growth of 4.7 per cent in the first nine months of 2018. This was driven by volume growth of 6.7 per cent. The Body & Fit acquisition delivered 2.4 per cent, offset by a pricing decline of 4.4 per cent.

Volume growth was broadly based and underpinned by successful innovation in key markets. Pricing decline reflected reinvestment of input cost savings in brand investment, foreign exchange headwinds, in certain non US markets, and innovation support.

The US market remains competitive for ready-to-eat in particular. GPN continues to manage channel shifts to the food, drug, mass and club channels, reflecting broader lifestyle consumer demand. In the LAPAC region several markets across Asia and LATAM delivered a good performance.

The company reports that GPN's full year outlook for 2018 is good. Guidance is reiterated for the delivery of like-for-like branded volume growth in the mid-to-high single digit range. EBITA margins for the full year are expected to be broadly in line with 2017.

Glanbia Nutritionals (GN) delivered revenue growth of 3.0 per cent in the first nine months of 2018. This was driven by a volume increase of 6.8 per cent offset by a price decline of 3.8 per cent.

Nutritional Solutions (NS) revenue increased by 0.7 per cent. This was driven by volume growth of 7.3 per cent as a result of a strong performance across all regions in the third quarter. Price declined by 6.6 per cent which was primarily related to relatively lower year-on-year dairy prices.

NS continues to focus on value-added ingredient solutions to drive growth with its customers. During the given period, specialist vitamin & mineral blends, dairy and plant-based ingredients have all performed well.

US Cheese revenue increased by 4.8 per cent in Q3. This was driven by volume growth of 6.4 per cent due to the timing of customer off-takes compared to the same period a year ago. Pricing declined by 1.6 per cent as a result of reduced year-on-year cheese markets.

GN expects moderate EBITA growth in full year 2018 to be driven by non-dairy ingredients and US Cheese which will be offset by a reduced performance in dairy ingredients as a result of lower year-on-year whey markets.

Guidance for GN is reiterated with volume growth in Nutritional Solutions, which is expected to be in the mid-to-high single digit range. GN’s EBITA margin for full year 2018 is expected to be line with 2017.

TheCattleSite News Desk



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